Attorneys General Endorse Consumer Protection Agency; 2 Dozen Primarily Democrats

Article excerpt

Byline: Sean Lengell, THE WASHINGTON TIMES

Two dozen state attorneys general have asked Congress to quickly draft legislation on an Obama administration proposal to create a new federal consumer protection agency to better regulate financial service markets.

The group of mostly Democratic attorneys general from 23 states and Guam co-signed a letter sent Monday to members of Congress on the key financial committees that are considering the proposed Consumer Financial Protection Agency.

The current financial crisis, caused in part by irresponsible subprime lending and inadequate oversight, has demonstrated the need for comprehensive and effective consumer protection and enforcement at the federal level, the letter says. We believe an independent federal agency combined with joint enforcement by state officials is the best option for meaningful consumer protection in this area.

The administration wants the new agency to oversee a vast range of financial products such as mortgages, credit cards and loans. The agency, if enacted by Congress, would consolidate many of the regulatory duties that are spread over several agencies, such as the Federal Reserve, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. (FDIC).

The White House says the new agency would help establish simpler and more transparent rules and would avoid needless duplication of regulations. It also is designed to plug regulator cracks the administration says allowed some financial institutions to engage in risky behavior that contributed to the global financial crisis that came to a head last autumn.

The agency would have broad power to write and enforce rules on financial products and services. …